New Delhi: Mutual funds (MFs) have become the investment tool of choice for Indian investors, who no longer treat them as tax-saving options, but buy them in the hope of earning higher returns, said a survey released by market researcher Nielsen Co.

Popular choice: An ICICI Bank branch in New Delhi. The Nielsen survey found mutual funds offered by ICICI Prudential to be among the most recalled brands among investors. Photograph: Rajeev Dabral / Mint.

In 2007, MFs had a 40% share of investment options available to consumers, said the Mutual Fund Brand Health Monitor-4 survey. Of 1,600 investors polled, 90% said they preferred to invest in MFs over other investment options, it said.

According to the Association of Mutual Funds in India, total assets under management in June were at Rs5.65 trillion, down from Rs6 trillion in May. That drop came as rising food and fuel prices pushed inflation to a 13-year high, credit costs rose and foreign inflows slumped amid global economic uncertainty. The Bombay Stock Exchange’s benchmark Sensex has declined 30% this year, buffeted by global economic headwinds.

Still, MFs have benefited from aggressive marketing, wider media coverage and higher returns they delivered to investors in recent years, Nielsen said in a statement, adding that there had been a mindset change among investors who regarded them once as tax-saving tools.

They are “...now buying them in the hope of greater financial return”, said Kalyan Karmakar, associate director for customized research at Nielsen.

The survey found Reliance Mutual Fund to be the most recalled brand among investors, followed by those offered by ICICI Prudential Asset Management Co., State Bank of India and HDFC Asset Management Co. Ltd.